Supply chain leaders are spending an ever-increasing amount of time addressing the environmental and social impacts of freight movement. Most companies remain on a reactive footing, responding to regulatory pressures, negative articles and community opposition to new warehouses. This posture can lead to narrow thinking from companies seeking a short-term reprieve from unwanted public attention, or a quick path forward for expansion plans.

Such thinking fails to recognize that a fundamental shift is underway. Over the past several years, scientists and community activists have developed sophisticated new tactics to pinpoint the environmental and social impact of freight operations. There is mounting evidence, for example, that exposure to nitrogen dioxide — a pollutant significantly associated with diesel pollution — leads to the development of asthma in children. 

With improved air pollution monitoring and better health data, we’re also able to understand how communities are impacted by this pollution. In downtown and West Oakland, where more than 70% of the population is people of color, up to one in two new childhood asthma cases are due to traffic-related air pollution. By contrast, in the Oakland Hills neighborhood, where more than 70% of the population is white, the fraction of childhood asthma from pollution is lower — about one in every five cases.

Pollution from freight operations can increasingly be connected back to the company that’s moving goods. 

The ocean shipping emissions footprint of IKEA, Target and Walmart, were calculated by Ship It Zero, a coalition of climate, clean air and consumer advocates. Colleagues at the Environmental Defense Fund developed a model for allocating truck emissions to freight shippers. Companies including Amazon have also been singled out for the impact of their warehouse operations. The impact that was once uncertain is becoming visible to all.

Supply chain leaders can and should be more proactive in addressing the societal impact of their freight operations. One key way to initiate this shift is to embrace the transition to zero-emission operations across the freight supply chain by making it an explicit organizational goal. With this framework in place, companies are positioned to see their near-term activities as part of a journey toward this end. 

There are three overarching categories of actions that companies can take to reduce the impact of their freight operations:

• Get the most out of every move. By maximizing the efficiency of their freight operations, companies minimize the amount of equipment needed to move freight, thereby limiting their environmental impact. This is an area where companies can move quickly today, by increasing load factors and embracing co-loading opportunities with compatible partners.
• Choose the most carbon-efficient mode. There’s a significant difference in cost and carbon impact among different transport modes — air, ocean, waterways, rail and road.
• Demand cleaner equipment and practices. This is the most critical action for achieving a long-term net-zero objective. Supply chain leaders have a central role in building the market for the zero-emission operations that will be needed in the years ahead. Cargo owners need to send a clear market signal that they want zero-emission services in order for freight providers to scale these operations.

Several companies are already demonstrating the role of cargo owners in driving forward zero-emission solutions. Unilever and Amazon are among the companies that have pledged to shift 100% of their ocean freight to vessels powered by zero-carbon fuels by 2040. SunPower partnered with Kuehne & Nagel and Dependable Highway Express to move some of its products by electric trucks. IKEA is working with National Retail Systems to use electric drayage trucks in California. More companies need to join with these leaders to build a freight system that can cost-effectively transport products without causing negative impacts on community health and the environment.

Leadership is critically needed to prioritize actions that reduce the impact on the most heavily burdened communities, including around ports, railyards and warehouses. A good place to start is for companies to map their operations alongside social, demographic and health information, which can help illustrate locations they should prioritize for action.

Supply chain leaders have a lot on their plate, especially after two years of a pandemic-challenged global economy. The immediacy of managing freight movement can make it a challenge for these leaders to prioritize understanding and address the environmental and social impact of freight operations. Reducing this impact, though, will be critical for freight operations going forward. Balancing these competing demands is a challenge. It’s also a unique and powerful opportunity to positively impact lives through the scope of your operations.

Jason Mathers is senior director, Vehicles and Freight, at Environmental Defense Fund.

Read more of SupplyChainBrain's 2022 Supply Chain ESG Guide here.